Investors nervous ahead of Powell’s comments at the annual Jackson Hole symposium this week
Wall Street stocks plunged on Monday, with the Dow Jones having its worst day since June as the selling pressure intensified on renewed fears of aggressive interest rate hikes by the Fed ahead of Powell’s comments at the annual Jackson Hole symposium this week. The Dow fell 1.91%, the S&P 500 dropped 2.14%, and the Nasdaq Composite tumbled 2.55%. In individual stocks, Google-parent Alphabet fell roughly 2.5%, Meta gave up 3%, while Amazon gave up 3.5%.
Asian equity markets were down for a sixth straight session on Tuesday amid resurgent fears of a recession after a fresh spike in European energy prices. MSCI’s broadest index of Asia-Pacific shares outside Japan dipped 0.4%. In Japan, the Nikkei 225 index fell 1.2% after a survey showed factory activity in Japan slowed to a 19-month low in August. South Korea’s Kospi dipped nearly 1%, Hong Kong’s Hang Seng shed 0.7%, while the Shanghai Composite fell 0.3%.
Following suit, European stocks fell on Tuesday, with the pan-European Euro Stoxx 600 sliding 0.2% in early deals. US stock index futures were fractionally higher in early premarket trade. On the data front, Eurozone’s August flash services PMI came in at 50.2 versus 50.5 expected, continuing to highlight a further decline in demand conditions. The manufacturing print beat estimates but still dropped to a 26-month low.
Meanwhile, the US dollar rallied above 109.00 on Monday to extend the ascent to the 109.30 zone earlier today before retreating marginally amid some profit-taking. As a reminder, this region capped demand last month to trigger a solid bearish correction. Should the USD index overcome the barrier this time, the 100.00 psychological level will come into the market focus next. EURUSD extended losses to fresh multi-year lows around 0.9900 before bouncing partially amid oversold conditions.